The present invention provides a dynamic telephone configuration mode for users of a telephone system. In a virtual configure mode, a user inputs a virtual extension. The input virtual extension is associated with the physical extension of the telephone being dynamically configured. The DC telephone is then operated as if it were associated with the virtual extension input by the user. In the physical configure mode, a user inputs a physical extension. The input physical extension is swapped with the physical extension of the telephone being dynamically configured. The DC telephone is then operated as if it were associated with the physical extension input by the user.